Crisis Crusher

Marchetti Puts His Trust In the Positive

By Scott Lewis
Managing Director, Willard PR

Dario Marchetti, general director of Danone Ukraine, tells a story about a regional sales manager for the company who, last April, unilaterally declared the economic crisis to be over.  Since then, Marchetti claims, the manager's sales are up more than 50 percent.

To Marchetti, the recession is largely a question of mind over matter.  He obviously likes telling this tale:  It supports his belief in the power of positive thinking, a strategy that has served him well in the past and continues to guide his management philosophy.

He says that while currency fluctuations are the company's biggest recession-related headache, the biggest challenge is human.  If anything, Marchetti says, the crisis has emphasized the importance of having fun at work.

"The biggest part of fun is learning," he says.  "I tell the teams that in the end, it's a game.  Then there's no stress, zero de-motivation.  It's how you approach it: This is a great challenge.  I see (the recession) as a way to prove to myself that I'm worth what I was when times were easier."

Today, Marchetti says that sales are strong, though with lower prices, which has translated to reduced margins.  The company also hasn't lowered its quality criteria, he says, at a time when competitors are scrimping, adding water to milk and adding vegetable oil to products like smetana and butter.  "Quality issues remain a big issue in Ukraine," he says, and companies that are using fillers and extenders aren't telling consumers that they are doing so.
 
"Adding water to milk deprives consumers of nutrition," Marchetti says. "The use of large amounts of vegetable oil is controversial.  In small amounts, there is no problem, but there's been no scientific study of the consumption of huge amounts of vegetable fat over the long term."

That's made quality one of Danone's major messages, he says, and perceptions don't always equal reality in a country where consumers favor buying 'babushka milk' in a market rather than milk that's been through a modern factory.  Marchetti said that much of the milk Danone uses is 'babushka milk' - that is, milk produced on small farms. That milk is made safer, though, he says, after processing.

Is that a sales point, or a marketing issue?   Marchetti says that companies that fail to differentiate between sales and marketing miss an important distinction.  Marketing isn't about "How can we sell this?" he asserts.
"In a company, marketing should represent the consumer," he says. "For me, marketers need to think about whether consumers want your product.  It's such a basic thing: Sales represents the company to the customer.  Marketing represents the customer to the company."

Even businesses where the distinction is made can cross the line.  "In practical reality, when we get down to it, our deeds don't always follow our words," Marchetti says.  

Where other multinational companies groom managers with financial expertise to become senior executives, Danone has tended to gravitate toward its marketers for executive suite material. 

"At Danone, marketing is a locomotive," he says, noting that the company's CEO and other senior staff came from the marketing side.

Yogurt is accepted and popular in Russia and Ukraine, but that doesn't mean that Marchetti hasn't had his share of career challenges.

In Latin America, yogurt is not a traditional product.  When he was sent to head marketing for Danone in Mexico, Marchetti had his work cut out for him. 

Mexicans had to be introduced to yogurt, taught how to use it and convinced that it was a product they needed to make part of their diet.  Many marketing directors would have been overwhelmed by the task, but Marchetti went to work, focusing on Danonino (sold here as Rastishka), a sweet cheese for children.  His message: Danonino spurs stronger growth.  "What mother doesn't want that for her child?" he asks, noting that as the product caught on, it opened the door to other Danone products. 
By the time Marchetti left Mexico, the country was Danone's fourth-largest market.

Next, he was assigned to Russia, where sales volumes doubled under his leadership.  He launched products including Rastishka and Activia, and added more than 15 SKUs to the company's product line. 

"We are driven through top-line growth," he says, adding that his years in Russia are a matter of great pride for him.
Marchetti practices what he preaches: His daily diet for years has included Actimel every morning, a Danissimo ("if I'm not tasting products in the office that day") and a drinkable apple and muesli-flavored Activia.

Though he's exchanged his marketing duties for the managing director's office, Marchetti's still always on the lookout for new ways to introduce Danone products to consumers.  After all, his marketing ability got him where he is today, and those skills will likely continue to serve him into the future.